SAIC to Purchase $254M Shares From Luckin Chairman Lu’s Car Rental Company

(Source: SAIC)

China’s largest automaker SAIC Motor Corp. Ltd agreed to pay HK$1.9 billion ($254 million) for 28.92% of car rental service provider Car Inc. (CAR), which would provide an exit for Luckin Chairman Charles Zhengyao Lu, who was CAR’s former chairman.

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SAIC will purchase shares from CAR’s shareholders UCAR Inc. and US private equity company Warburg Pincus’ Amber Gem Holdings Limited unit, according to the statement CAR filed with the Hong Kong stock exchange on Thursday.

SAIC will become the largest shareholder of CAR, in place of another state-owned auto company BAIC Group, which has roughly 21.26% of CAR’s issued shares.

The leading car rental company owns 148,894 cars and more than 1,000 stores nationwide as of 2019. Its 2019 revenue reached 7.69 billion yuan.

Luckin Chairman Lu has been gradually withdrawing from CAR after Luckin’s sales fraud scandal. He resigned from CAR on June 10. Lu will no longer own CAR’s shares after the deal.